Mr Jones said he wanted Wales' potential to be unlocked by stronger Welsh Assembly leadership and greater constitutional power.

"What we hear from the politicians of other parties is that ... we could not afford to be responsible for governing our own country," he said.

"Plaid Cymru's task is to challenge this negative vision and to attack it root and branch ... and to assert that Wales could and should be one of Europe's most successful regions."

He said his party would use Wales' natural resources - water, energy, a beautiful landscape - to transform the country.

Mr Jones told delegates the Labour-led Welsh Assembly coalition "lacks any direction, vision or ambition" which he accused of failing to unite the nation.

Mr Jones wants to unlock Wales' potential

"Hasn't Labour's Assembly looked after the interests of an elite around Cardiff and forgotten about the rest of Wales?" he asked.

"Wales is ... a nation that can make a significant contribution to the multicultural, multilingual world in which we live.

"It's little wonder that the people of Wales have been disappointed. All they have seen in Labour's Assembly is empty talk.

Mr Jones said Labour had had its "big chance" in Wales but had failed the electorate badly.

"New Labour has failed the people of Wales as well as the people of Britain," he said.

"The gap between rich and poor continues to grow. Labour has failed to tackle rising crime.

"And what of New Labour's promised ethical foreign policy? That did not last long, did it?"

Mr Jones accused New Labour of "failing" on health and on public services.

Plaid Cymru would reject privatisation plans and stop "flogging [public services] off at a discount to the private sector".

He said he would end the "endless revamping of structures and administration" - in a nod to Welsh Health Minister Jane Hutt's abolition of Wales' five regional health boards in favour for 22 local health authorities.

Mr Jones said a Plaid Cymru government would ensure "development reaches every part of Wales; that targets are being set to create jobs in all parts of Wales - and those to be quality jobs".

In a nod to recent debates on the future of small communities, he said he would give people the chance to work in their own areas, to slow down outward migration.

And he said he would support indigenous businesses over inward investment. He would simplify grants application procedures and cut red tape.

Mr Jones said action from the US and the UK against Saddam Hussein would destabilise the Middle East. He called, instead, for a resolution to the Israeli-Palestinian conflict.

War on Saddam Hussein would be 'unjust'

"Make no mistake, Saddam Hussein is an evil man at the head of an evil regime. We were opposing him when western governments were still selling him arms.

"But we have not seen any credible evidence that Iraq poses a threat to the United States or Britain.

"We cannot accept that war is right or justified. It will lead to thousands of innocent casualties."

Earlier, party members also voted for a radical proposal to license brothels in Wales.

The motion came from the Cardiff South and Cathays branches of the party in the capital city and was backed at the conference.

They want sex workers to be taxed and to introduce regular health checks for prostitutes in controlled environments.